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Old Yesterday, 12:17 PM
 
691 posts, read 131,428 times
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What retirement crisis?

Eight in 10 retirees tell Gallup they have enough money to “live comfortably,” and 6 in 10 working-age households say the same. Seventy-five percent of retirees tell the Federal Reserve’s Survey of Consumer Finances they have “at least enough to maintain their standard of living,” up from 61% in 1992. Census Bureau research that uses Internal Revenue Service data to measure retirees’ incomes found that the over-65 poverty rate was only 6.7% in 2012, down from 9.7% in 1990 and lower than any other age group.

More Americans are saving more than ever for retirement. While participation in defined-benefit pensions peaked at 39% of employees in 1973, today, the Social Security Administration says that 61% of workers, including 80% of married couples, participate in an employer-sponsored retirement plan. Non-savers are mostly low-earners (who will capture the lion's share of social welfare transfer payments), or young employees who will save as their earnings rise with experience.

Retirement-plan contribution dollars are up as well, Labor Department data show. From 1975-84, total employer and employee contributions averaged 6% of employee wages; over the past decade the average has been 8.3%. Retirement savings in employer-sponsored plans and individual retirement accounts are at record levels, rising sixfold since the mid-1970s.

Retirement incomes have risen too. According to Fed data, the median retiree household’s income grew by 56% above inflation from 1989 through 2016, versus only 4% real growth for working-age households. Incomes grew faster at the poorest fifth percentile of retirees than at the 95th percentile of the working-age population.

The Phony Retirement Crisis
Contrary to the alarms, household savings are growing. But government plans are underfunded.


https://www.wsj.com/articles/the-pho...is-11551398196

Last edited by RationalExpectations; Yesterday at 12:28 PM..
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Old Yesterday, 12:31 PM
 
24,919 posts, read 32,012,135 times
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And then there is this...

The country faces a growing retirement crisis. An ever larger share of the fastest growing part of the population will struggle to make ends meet in retirement. Estimates show that many have not saved enough to offset declining Social Security benefits and rising costs due to greater longevity and health care inflation, just for starters.

As a result, we should see retirees increasingly face financial struggles. This hasn't happened yet because a number of favorable trends in recent years have helped older households to offset insufficient savings. Many older workers have been able to find paid work and stayed on the job for longer than would have been possible just a few years ago. More jobs mean later retirement and higher incomes. And the stock market gains of the past several years have boosted balances in 401(k)s and IRAs.

The reality of the retirement crisis has not gone away because recent favorable trends have temporarily helped out older workers . More jobs and higher retirement balances are certainly welcome, but retirees can unexpectedly face a sharp downturn in their economic security in the next recession. In fact, it is likely that the outlook for retirement security will become worse much faster in the next recession than in previous ones .


https://www.forbes.com/sites/christi.../#5e98202b2c6d


And this...
Due to a number of factors, the financial health of the Social Security trust fund has been declining. According to the 2018 Trustees Report on Social Security, the fund will be depleted by 2034. That is only 16 years away. At the same time, the availability of employer-provided pension plans has also been declining. Few private sector workers today have access to a pension, and many public sector pension plans are facing severe financial problems. . . .

We’ve moved from a collective retirement system to one in which each person is expected to go it alone. . . .

The retirement crisis is a tsunami that is rapidly approaching.

https://www.forbes.com/sites/ebauer/.../#1d8a204f1ac7


And lots more...
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Old Yesterday, 01:04 PM
 
Location: SoCal
11,454 posts, read 5,506,181 times
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Faux retirement crisis from fake news. Make a lot of sense. Yesterday, CNBC said people saved more during Dec 2018, they didnt go shopping.

Last edited by NewbieHere; Yesterday at 01:24 PM..
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Old Yesterday, 01:18 PM
 
18,198 posts, read 12,912,978 times
Reputation: 13538
Quote:
Originally Posted by RationalExpectations View Post
What retirement crisis?

Eight in 10 retirees tell Gallup they have enough money to “live comfortably,” and 6 in 10 working-age households say the same. Seventy-five percent of retirees tell the Federal Reserve’s Survey of Consumer Finances they have “at least enough to maintain their standard of living,” up from 61% in 1992. Census Bureau research that uses Internal Revenue Service data to measure retirees’ incomes found that the over-65 poverty rate was only 6.7% in 2012, down from 9.7% in 1990 and lower than any other age group.

More Americans are saving more than ever for retirement. While participation in defined-benefit pensions peaked at 39% of employees in 1973, today, the Social Security Administration says that 61% of workers, including 80% of married couples, participate in an employer-sponsored retirement plan. Non-savers are mostly low-earners (who will capture the lion's share of social welfare transfer payments), or young employees who will save as their earnings rise with experience.

Retirement-plan contribution dollars are up as well, Labor Department data show. From 1975-84, total employer and employee contributions averaged 6% of employee wages; over the past decade the average has been 8.3%. Retirement savings in employer-sponsored plans and individual retirement accounts are at record levels, rising sixfold since the mid-1970s.

Retirement incomes have risen too. According to Fed data, the median retiree household’s income grew by 56% above inflation from 1989 through 2016, versus only 4% real growth for working-age households. Incomes grew faster at the poorest fifth percentile of retirees than at the 95th percentile of the working-age population.

The Phony Retirement Crisis
Contrary to the alarms, household savings are growing. But government plans are underfunded.


https://www.wsj.com/articles/the-pho...is-11551398196

8 in 10 or 6 in 10 retirees, well the truth is most of them have no clue how much they need to be comfortable or to survive, most will survive despite being inadequately funded well because they don’t have another option
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Old Yesterday, 01:19 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
21,615 posts, read 38,670,300 times
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Saving 'more', vs funding a period of 30+ yrs with no / minimal income stream is a pretty big step.

While most of us on C-D are a tad higher level earners / savers / investors... I do not think it represents the norm, or even 30% of the USA population demographics heading toward retirement..

I expect 50% of the 'grunts*' don't have enough dough, nor ever will... (*non-pension / not capable of financial planning for a secure income stream for 30 yrs). The estimate ranges from $1-$4m in CASH / investments required, (or a pension). This is highly dependent on medical costs (unknown). I have had 4 friend retire WELL, and lost everything due to medical, leaving an impoverished spouse and family behind. No home, no assets, no income. These people all had well over $1m, some over $4m... then one major illness...& POOF, gone! (money and the retiree 'wage / pension earner').

Our local metro area had over 1200 homeless on the streets last night, 2x that many in shelters. Not all are there by choice.

I've retired 4 times, and not sure I will die before I run outta dough (getting more likely to succeed on dying first... the closer I get to age 60+)

Retire Early, retire often. (I need the practice)
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Old Yesterday, 01:24 PM
 
Location: SoCal
11,454 posts, read 5,506,181 times
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The IRS has much better picture of everybody’s income.
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Old Yesterday, 01:27 PM
 
18,198 posts, read 12,912,978 times
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Quote:
Originally Posted by NewbieHere View Post
The IRS has much better picture of everybodyís income.
Do they have a good picture of everybodyís expenses and needs ?
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Old Yesterday, 01:59 PM
 
Location: Philadelphia/South Jersey area
2,632 posts, read 1,239,265 times
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Quote:
Originally Posted by Lowexpectations View Post
8 in 10 or 6 in 10 retirees, well the truth is most of them have no clue how much they need to be comfortable or to survive, most will survive despite being inadequately funded well because they donít have another option
well if they are surviving, where is the crisis?

I have always said this "retirement" crisis was waay over exaggerated. now I do admit that my circle of trust is not that big but as I am approaching retirement I've seen basically that most retirees are living the life they had pre retirement.

the ones that are struggling are the ones that were struggling prior.

I do not know 1 person who retired and all of a sudden are in financial crisis. I think it's a bunch of crap that the financial industry is selling that you need millions of dollars to retire.
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Old Yesterday, 02:45 PM
 
24,919 posts, read 32,012,135 times
Reputation: 30328
What motivates me the most is my own parents situation.

87/92, both on dialysis with major health issues. House is mortgage free, and there is a tiny pension check, and SS. That is it. Less than 100k in the bank (far less..dropping monthly) as they require caregivers during the day. Mom was in the hospital/rehab for 6 months in 2015 after a back-surgery-gone wrong, and even though they have a supplemental policy, there were some very large bills that kicked the air our of their savings account. She has never fully recovered and neither one could live alone.

We (me and siblings) are taking steps to get them a HELOC to have the funds needed in case one of them passes and the other needs either more care (neither wants to move into a home, naturally, and we want to try and accommodate their wishes). Saving is not something either of them really thought much about. Certainly they never anticipated their health issues. Both retired far sooner than they should have, frankly. But that is them...and I don't intend to wind up in a similar situation.
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Old Yesterday, 03:07 PM
 
2,134 posts, read 885,242 times
Reputation: 8554
Quote:
Originally Posted by StealthRabbit View Post
Saving 'more', vs funding a period of 30+ yrs with no / minimal income stream is a pretty big step.

While most of us on C-D are a tad higher level earners / savers / investors... I do not think it represents the norm, or even 30% of the USA population demographics heading toward retirement..

I expect 50% of the 'grunts*' don't have enough dough, nor ever will... (*non-pension / not capable of financial planning for a secure income stream for 30 yrs). The estimate ranges from $1-$4m in CASH / investments required, (or a pension). This is highly dependent on medical costs (unknown). I have had 4 friend retire WELL, and lost everything due to medical, leaving an impoverished spouse and family behind. No home, no assets, no income. These people all had well over $1m, some over $4m... then one major illness...& POOF, gone! (money and the retiree 'wage / pension earner').

Our local metro area had over 1200 homeless on the streets last night, 2x that many in shelters. Not all are there by choice.

I've retired 4 times, and not sure I will die before I run outta dough (getting more likely to succeed on dying first... the closer I get to age 60+)

Retire Early, retire often. (I need the practice)
This. This is what happened to me. I was software engineer and I was GOOD at my job. Then I started to have memory problems. I thought it was "just stress" so I decided to take a couple of years off and build myself a home in a rural area. Well it wasn't just stress. It was something neurological. I have no sense of passing time. I can't tell how long ago something was, last week? No, that was TWO YEARS AGO. People can talk to me and 10 minutes later I have no memory not only of what was said, but of having been in the presence of the other person AT ALL.

I made good money back then. DAMM good money. Saved a crapload of it. That was all sucked up in the early stages of "figuring out what is wrong with me". If it hadn't been for my son, himself a grad student at the time, who took me in, I'd have been homeless long ago, AND I'd be dead by now because I think its pretty clear by now, regardless of whether or not someone is going to be able to get the drop on me (and at 5' 2" that's pretty nearly everybody) I'm going to get in their face if they get in mine. Which, on the street, will get you stabbed or beaten to death in nothing flat.

It took nearly 4 years for me to stabilize at a somewhat higher level than I had been at my worst, but still not "normal". It took THREE years for me to get disability and I had to go before a judge to do it. When he saw me, he was appalled. It took 5 minutes to approve my application, I was that badly off. I could barely track for years.

Even though I've improved to the point where I can drive again (at least some times) and more or less effectively live on my own, I am still virtually unemployable. My hands don't always work right. My balance is shot. I have vertigo. Lots of pains that are mostly minor and ignorable, but can't stand or walk for long periods of time. Can't be relied on to remember what I've been told. Can't be relied on not to skip important steps. I get confused at times. I not only can't go back to my job as a software engineer, I can't even remember how to work a cash register. I tried. I'm not proud. Work is work, and I needed to contribute to the household funds, my son was supporting me on like 10k per year. Got a job in a local grocery store and I could not remember half of what I needed to. I had a notebook that was full of notes about what was supposed to be done when, and directions for how to work the cash register.

I'm educated. I'm intelligent. In fact, historically, I've been HYPERintelligent.

But I'm living on the high side of poverty now - which, however you slice it, is a vast improvement over being homeless - only because my son rescued me when I was at my worst, because I finally DID get disability income, and because I'm just plain tough. Because I AM a getinyourface type of person, even when "you" is "me" and my failing body.

If any one of those resources went away, I would not only have ended up homeless, I'd have ended up dead.
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